Question 21

The opportunity cost of one unit of fish in Grand Coast is ½ unit of timber.

In Grand Coast, the opportunity cost of producing one unit of fish is ½ unit of timber, meaning that for every unit of fish produced, the country forgoes the opportunity to produce half a unit of timber.

A) ½ unit of timber

This option accurately reflects the opportunity cost of producing one unit of fish in Grand Coast. It indicates that Grand Coast sacrifices ½ unit of timber for each unit of fish it produces, which aligns with the economic concept of opportunity cost.

B) 5 units of timber

This option is incorrect as it significantly overstates the opportunity cost. A cost of 5 units of timber for one unit of fish does not align with the data presented, suggesting a misunderstanding of the trade-off between the two goods.

C) 2 units of fish

This option is also incorrect because it misinterprets the opportunity cost concept. It suggests that producing fish incurs a cost of other fish, which does not apply here as the opportunity cost should be measured in terms of timber.

D) 8 units of fish

This option is incorrect as it implies that producing one unit of fish costs an unrealistic amount of fish, which contradicts the fundamental understanding of opportunity costs. The data does not support such a high trade-off ratio between fish production.

Conclusion

The correct answer, ½ unit of timber, is supported by the economic data provided for Grand Coast, illustrating a clear and rational opportunity cost. All other options fail to accurately represent the trade-offs involved, either by miscalculating the timber-to-fish ratio or misunderstanding the concept of opportunity cost itself.